White Knight For Flailing Knight: WSJ Reports Potential Bailout Merger In The Works

Tyler Durden's picture

Earlier we said that Knight better sell itself today or it's lights out. Sure enough, here come the rumors via the WSJ:

Knight Capital is in talks with Virtu Financial, a big player in high-speed trading and "designated market maker" on the NYSE, about a potential merger or infusion of capital

And more from Dow Jones:

  • WSJ: Knight in Discussions About Possible Deal With Electronic-Trading Firm Virtu — Sources
  • WSJ: Talks Also Involve Silver Lake Partners, An Investor in Virtu — Sources
  • WSJ: Talks in Early Stages and No Deal Guaranteed — Sources
  • WSJ: Knight Also in Talks With Other Potential Funders, Partners — Sources

Will it happen? Maybe. Although we doubt it - why pay for equity value when one can pick up the functioning assets in a Chapter 363 asset sale which also sticks the creditors with all the crappy assets? Just like Barclays did with Lehman for millipennies on the dollar.

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RockyRacoon's picture

No doubt, we, the taxpayer, will back this "merger".

Virtu ?  What?  These guys can't even spell let alone justify the name.  The name is not even catchy, it just makes me wanna gag.

There hasn't been "virtue" on Wall Street in long time.

AcidRastaHead's picture

Bonus time for some.  Millipenny time for others.

fightthepower's picture

Fuck you Bernanke!

Brother Sebastian's picture

Before you criticize Benny-boy, you should walk a mile in his shoes.  That way, when you criticize him, you're a mile away and you have his shoes.

Muppet of the Universe's picture

Don't fuck Benny boy.  He might be the only person left to bail-out the futures market if these futures accounts dont get transfered to a liquid clearing firm.

OneTinSoldier66's picture

Thank you Brother Sebastian, that was great!

The Axe's picture

Kenny pasternack   has wallet open......5 dollar bid soon....

buzzsaw99's picture

then they can play ping pong? great.

malikai's picture

Should be good for a little pop in their share price as the momos and headline reading bots catch knives.

Piranhanoia's picture

Smart money buying a turkey that is so dead only the feathers have any value.

mrdenis's picture

Captain America saves the day ...

emersonreturn's picture

tyler, you invariably call it with uncanny accuracy, it's fun watching the results come in time and again.

Miss Expectations's picture

FIDELITY SMALL CAP DISCOVERY FUND apparently knows what it's doing.

Mercury's picture

Will it happen? Maybe. Although we doubt it - why pay for equity value when one can pick up the functioning assets in a Chapter 363 asset sale which also sticks the creditors with all the crappy assets? Just like Barclays did with Lehman for millipennies on the dollar.

 Résumé flow may be the best tell here...

HD's picture

At least they are consistent with their HFT business model...nanosecond bankruptcy.

Jlmadyson's picture

Blah blah blah, bailout, AIG, Lehman Bros,, Bear Sterns, Margin Calls, Fannie, Freddie, CorZine.

Just another day in Wonderland.

Call me Ishmael's picture

Didn't these guys watch Office Space? The penny and nickle skimming algo goes ape shit and the people that made it are lucky to get jobs digging ditches.

seamus3500's picture

or drinking margaritas on the beach with too much salt

JLee2027's picture

7.5 Billlion in cash on their balance sheet. What about that? Is it really not there?

alien-IQ's picture

hurling a hail mary to an empty field. great strategy. What's next? blaming the shorts?

eclectic syncretist's picture

A market maker being run by a HFT operation????!!!!

 

Good thing I faded that trade the NY Fed promoted for the days immediately preceding through the day after a Fed meeting.  Bastards fleeced the sheep for nearly 3% on this trip.

http://www.newyorkfed.org/research/staff_reports/sr512.pdf

ArrestBobRubin's picture

Knight had complained publically about the blatant Facebook scam. Look what's happened. First ruined via a "glitch", then made to disapperar via a "merger". A very odd sequence of events indeed.

Critical Lessons From The Facebook Scam: A Blast From The Past

ArsoN's picture

nothing like a little sub rosa action to keep the house of cards from collapsing for another week or two.  

John Law Lives's picture

Could it be a desperate attempt to keep the stock price afloat whilst insiders dump...

Seasmoke's picture

surely Jamie smells blood in the water

Meesohaawnee's picture

I hear there are some programmers looking for work?

Dr. Engali's picture

Knight Capital is dead. Just need Mr. market to pull the final plug.